Read the following answer: List and discuss the three customer relationship steps outlined in the article.

A significant part of CRM, and usually the first step in the relationship process is getting to know your consumers, their likes, dislikes, and things of that nature. This learning process has been going on for years, especially in the hotel industry, with the comment cards that guests would fill out. As Stringam and Gerdes Jr (2010) state, hoteliers have found that review of the information in comment cards enabled them to make management decisions that resulted in improved service operations, increased profitability of the hotel, and increased the loyalty of hotel guests (p 776). It is important that companies listen to their customers, because by doing so they might just be able to avoid a pitfall down the road.

Social media can make it much easier for companies to learn about their customers, even if it’s just by reading what they write online. Kaplan and Haenlein (2010) say that companies should find out what their consumers would like to hear, what they would like to talk about, and what they might find interesting, enjoyable, and valuable; then the company should go about developing and posting content that fits those expectations (p 66). O’Connor (2008) also points out that becoming friends with the customer allows

companies to see first-hand what their customers are like, and can be an incredible source of market intelligence, as it can give them access to information that would be difficult or impossible to obtain otherwise.

Another important step in the CRM process is that of retaining consumers. Woodcock et al., (2011) point out that through the use of SCRM a company can get to know their high value customers, and then proceed to market accordingly to those customers (p 56), ideally creating the feeling for the customer of being in a one-on-one relationship with the company or brand. This is one of the major pluses of using social media in CRM, as it has the ability to create a sense of trust between the marketer and the consumer, and it can also lead to better customer service. Murphy et al., (2003) show that customer service has a strong link to customer satisfaction, which then yields customer loyalty and long-term

profitability (p 76). It has also been shown that when a company gets their customers involved and engaged, it can lead to lasting working relationships with organizations (Lee, 2010, p 7), and that maintaining ongoing contact is essential to developing and keeping that relationship (Keirzkowski et al., 1996, p 15).

The third step in the customer relationship management cycle is engaging the customer, because through engaging the customer, you can keep them on your side. Woodcock et al. (2011) state that it is clear that the greater the consumer engagement, the greater the financial value of the customer, and that a deeply engaged, or committed consumer has 5x-8x the value of an average consumer (p 56). This means that if you are able to engage your consumers and move them from just being mildly committed to engaged, you increase the value of that consumer for your company.

Different types of social media can have different effects on consumers and consumer brand relationships. A fan page on Facebook allows customers to communicate with one another, and more importantly, to communicate with the company (Zhang et al., 2011, p 1). The use of corporate blogs enables companies to strengthen relationships with their customers (Lee, 2011, p 17), as the customers are kept abreast of the happenings at the company and therefore feel involved. Firms are also increasingly trying to use online communities to enhance their customer relationships (McAlexander, Schouten, and Koenig, 2002, as cited in Hennig-Thurau et al., 2010, p 319). For example, in online communities of information technology firms such as Hewlett-Packard and Microsoft experienced customers support peer customers who face product-related problems ("consumer support forums"; e.g., Mathwick, Wiertz, and De Ruyter 2008, as cited in Hennig-Thurau et al., 2010, p 319).